SMITH HAVEN MALL IS SOLD FOR $221M
Byline: Mark Tosh
NEW YORK — Simon Property Group Inc. said Thursday it has teamed up with an institutional investor to acquire Smith Haven Mall in Suffolk County, Long Island, for $221 million.
The 1.4-million-square-foot regional mall, which opened in 1969, was owned by Prudential Real Estate Investors Separate Account. It is one of the 20 most productive shopping centers in the U.S., with sales of more than $400 per square foot, according to Simon, which owns 122 retail properties in the U.S.
Simon declined to disclose the name of its institutional partner in the joint venture, but said the investor was represented by UBS Asset Management Inc., a New York-based investment management firm. Simon will own 25 percent of Smith Haven and will manage the property. The investor will control 75 percent of the venture.
The mall is anchored by Macy’s, Stern’s and Sears, Roebuck. It is 91 percent leased and was last remodeled in 1986.
Funds for the purchase will be provided by equity contributions from Simon and the investor. The partners are attempting to place a $115 million first mortgage.
“Smith Haven is dominant in its trade area, will provide great synergy with our eastern properties and has significant redevelopment potential,” David Simon, president and chief executive officer of Simon Property Group, said in a statement.
Separately, Simon said it has completed the acquisition of land that will allow it to proceed with the development of The Source in Westbury, Long Island. The Source, a two-level, 730,000-square-foot enclosed mall, is set to break ground early next year and open in fall 1997.
Simon is developing the $145 million center with Fortunoff’s, which has an existing 160,000-square-foot department store on the site. Simon and Fortunoff each own 50 percent of the project, which will include outlet stores and full-price retailers.
Among the tenants are Off 5th Saks Fifth Avenue Outlet, Nordstrom Rack, Virgin Megastore, Just for Feet and Cheesecake Factory.
Other possible tenants, according to reports, are The Gap’s Old Navy Clothing Co., Jonathan Logan, Cosmetics Plus and Galo Shoes. A spokeswoman for Simon declined comment on the reports.
“Coupled together, these projects strategically increase our presence in the populous Northeastern portion of the U.S.,” David Simon said. “We will have ownership interests in and manage two of the most important retail real estate assets in the desirable Long Island market.”